While most local governments struggle to access funds for their low-emission and climate resilient projects, within just one year Brasília, the federal capital of Brazil and government seat of the Federal District, managed to fundraise over USD 450M for implementation in 2021.
Although in recent years significant strides have been made with regards to availability of climate finance for local governments, accessibility of those funds remains too limited to effect the change needed. Several barriers to accessing capital have been identified, including fiscal and/or technical capacity limitations, and challenges from project preparation to accessing finance and implementation. To develop robust and bankable projects, finance is needed already at a very early stage, representing up to 12% of the total project cost. In emerging economies, due to the limited financial sources and level of autonomy of action, pre-financing or co-financing is not yet affordable. Additionally, when finance is available, local governments often lack information on these various financing opportunities and project preparation facilities at hand. The current financial architecture is complex and not easy to navigate, nor is it easy to identify the right financial model.
